Global banks seeking details of U.S. sanction threat against China individuals for Hong Kong law By Reuters




By Alun John, Scott Murdoch and Sumeet Chatterjee

HONG KONG (Reuters) – International banks were seeking details on Friday of the scope of U.S. legislation that would penalize them for doing business with Chinese officials who implement Beijing’s sweeping new national security law on Hong Kong.

The U.S. Senate passed the bill unanimously on Thursday, a day after it saw full support in the House of Representatives, in a rare example of bipartisan support that reflects politicians’ concern over the erosion of the Hong Kong’s autonomy following China’s imposition of the law on Tuesday.

The bill calls for sanctions on Chinese officials and others who help violate Hong Kong’s autonomy, and financial institutions that do business with those who are found to have participated in any crackdown on the city.

But it does not lay out which individuals might be included, nor what they would be forbidden from doing.

Banks including Citigroup (NYSE:) and Bank of America (NYSE:) were among those holding calls on Friday with U.S. colleagues to discuss the potential fallout from the legislation, but few conclusions could be drawn at this stage, sources said.

Spokesmen for the banks declined to comment.

President Donald Trump has not yet indicated if he will sign the bill into law.

“Financial institutions are concerned about the legislation principally because of uncertainty about how the sanctions will be used,” said Nick Turner, a lawyer specializing in sanctions and anti money laundering at Steptoe and Johnson in Hong Kong.

Turner said the main area of uncertainty was around what would constitute a significant transaction, and whether that would prevent a bank providing retail or private banking services to a sanctioned person, as well as which individuals might be named.

The bill calls for the Secretary of State to report to Congress within 90 days of the law’s passage and identify any foreign person who has, or is, materially contributing to undermining Hong Kong’s autonomy.

Within 60 days, the Treasury Secretary must then submit a report identifying those banks that have knowingly conducted a significant transaction with someone named.

“Internally, it’s very difficult for us to take a call on this now and think about its impact without seeing the names of the people and the entities that would be targeted,” said a trade finance banker at a large European bank, who also discussed the bill with colleagues on a call.

“If they name party members who are sitting on the boards of large SOEs (state-owned enterprises), that would create a massive problem,” he added, declining to be identified due to the sensitivity of the matter.

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Cathay Pacific plans to repay Hong Kong government over three to five years By Reuters




By Jamie Freed

SYDNEY (Reuters) – Cathay Pacific Airways Ltd (HK:) said it expects to repay the Hong Kong government for HK$19.5 billion ($2.52 billion) of preference shares over a three to five year period.

The shares are part of a $5 billion recapitalisation package announced on Tuesday to help the airline weather the coronavirus crisis, which the International Air Transport Association estimates will cost the industry a record $84 billion in 2020.

The notes carry a coupon rate of 3% for the first three years, rising to 5% in year four, 7% in year five and 9% in year six, giving the airline an incentive to redeem them.

“We would certainly be expecting to repay that over a 3-5 year period,” Chief Financial Officer Martin Murray said in an analyst briefing posted to the airline’s website late Tuesday.

Murray said the package, which also includes a HK$11.7 billion rights issue to current shareholders including Swire Pacific Ltd (HK:), Air China (OTC:) Ltd (SS:) and Qatar Airways, would more than halve the airline’s gearing levels.

“That in turn restores access to both the equity and debt market and allows us to tap that market later in the year or next year for equity and debt,” he said.

The Hong Kong government could gain a 6% stake in Cathay via HK$1.95 billion of warrants convertible to shares. Finance Secretary Paul Chan said on Tuesday it was not the goverment’s intention to remain a long-term shareholder in Cathay.

Swire, which owns 45% of Cathay, has agreed to remain a controlling shareholder for as long as the government owns preference shares or any amount of a HK$7.8 billion bridging loan remains outstanding.

Daiwa analyst Kelvin Lau told clients he expected the airline’s share price to come under pressure because of the potential 43% dilution from the recapitalisation package.

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



40% of New Fintech Firms in Hong Kong Operate With Blockchain By Cointelegraph



40% of New Fintech Firms in Hong Kong Operate With Blockchain

Blockchain firms are increasingly dominating Hong Kong’s financial technology sector, with 39% of new firms launching in the country’s fintech industry last year operating with distributed ledger technology, or DLT.

According to Hong Kong’s Financial Services and Treasury Bureau, DLT represents an increasingly dominant share of the country’s new fintech firms year-over-year, up from 27% as of 2018.

Continue Reading on Coin Telegraph

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Vigil banned, Hong Kong set to commemorate Tiananmen with ‘candles everywhere’ By Reuters


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© Reuters. People attend a candlelight vigil ahead of the 31st anniversary of protests at Beijing’s Tiananmen Square, in Hong Kong

2/4

HONG KONG (Reuters) – People in Hong Kong are set to commemorate the bloody 1989 crackdown by Chinese troops in and around Tiananmen Square (NYSE:) by lighting candles across the city on Thursday, after police banned an annual vigil, citing the coronavirus.

The anniversary strikes an especially sensitive nerve in the semi-autonomous city this year after Beijing’s move last month to impose national security legislation on Hong Kong, which critics fear will crush freedoms in the financial hub.

It also comes as Chinese media and some Beijing officials have voiced support for protests against police brutality across the United States.

In past years, Hong Kong’s candlelight vigils have drawn tens of thousands of people to the city’s Victoria Park.

But police said this week a mass gathering would pose a threat to public health just as the city reported its first locally transmitted coronavirus cases in weeks.

Malissa Chan, a 26-year-old who works in the property sector, said she will go to the park anyway.

“When authorities want to suppress us, there are more reasons to speak up,” she said.

Lee Cheuk-yan, the head of the group that organises the annual vigil, told Reuters residents will light candles everywhere across the city instead.

Calls have come out online for people to light candles in specific places throughout the evening and then “where you are” at 8:00 pm local time (1200 GMT), followed by a minute of silence.

With social distancing measures allowing for religious gatherings under certain conditions, some people plan to commemorate the crackdown in churches and temples. Residents are also expected to lay flowers along a waterfront promenade, while some artists plan to stage short street theatre plays.

Hong Kong has banned gatherings of more than eight people, a public health measure authorities have repeatedly said had no political motivation.

China has never provided a full accounting of the 1989 violence, but rights groups and witnesses say the death toll could have run into the thousands. The death toll given by officials days after the crackdown was about 300, most of them soldiers, with only 23 students confirmed killed.

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Dollar peg is critical to Hong Kong amid U.S. threats, China worries By Reuters



© Reuters.

By Noah Sin

HONG KONG (Reuters) – China’s plans to impose a national security law on Hong Kong and moves by the United States to begin withdrawing privileges enjoyed by the city under U.S. law have unsettled investors. They have also raised fears about the stability of the Hong Kong dollar’s (HKD) 36-year old peg to its U.S. counterpart, prompting local officials to issue several reassurances. =d3>

HOW THE PEG WORKS

The HKD is pegged in a narrow range of 7.75-7.85 to the U.S. dollar. The Hong Kong Monetary Authority (HKMA) buys and sells the currency at either limit to maintain the range. Buying HKD boosts it by reducing its availability and raises the costs of betting against the currency. Sales do the opposite.

To maintain the peg, official Hong Kong interest rates track U.S. monetary policy. The currency’s movement within its trading band is influenced by differences between market interest rates in both. Hong Kong interbank rates are higher than their U.S. equivalents , helping keep the HKD strong in spite of concerns about outflows related to the national security law. 

HOW VULNERABLE IS THE PEG?

There are fears that escalating U.S.-China tensions could result in the United States potentially limiting Hong Kong banks’ access to U.S. dollars, thus putting an end to the peg.

Eddie Yue, chief executive of the HKMA, said on Tuesday the peg predates by nine years the 1992 U.S. Act which grants Hong Kong special status – whose provisions Washington is currently reconsidering.

“For the past 36 years, the (peg) has withstood the test of various market shocks and has been operating smoothly,” Yue wrote in a blog post on June 2. “It is a pillar of Hong Kong’s monetary and financial systems and will not be changed because of any shift in foreign policies towards Hong Kong.”

Hong Kong also has $440 billion in reserves – six times the currency in circulation. The HKMA can also call on China’s central bank for U.S. dollars, the city’s top finance official said this week.

WHY THE HKD MATTERS

Hong Kong’s economy has shrunk in its importance relative to the mainland since the territory’s 1997 handover to China but its financial significance has grown. Any real threat to the peg risks undermining that.

With China maintaining tight capital controls, Hong Kong acts as a key financing conduit, hosting one of the largest stock markets in the world and acting as the biggest gateway for international investment in mainland stocks and bonds. It has also become one of the world’s biggest currency trading centres and ranks third globally for U.S. dollar trading.

China’s wealthy have put faith in the city too, with more than half of Hong Kong’s estimated private wealth of more than $1 trillion coming from mainland individuals.

 

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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What Hong Kong Losing Its ‘Special Status’ Would Mean By Bloomberg



© Bloomberg. Demonstrators marching along Hennessy Road are seen through a ripped poster displayed on a bridge during a protest in the Causeway Bay district of Hong Kong, China, on Tuesday, Oct. 1, 2019. Police shot tear gas volleys at protesters as simultaneous rallies raged across Hong Kong, including a march through the city center, hours after celebrations for a holiday marking 70 years of Communist rule in China began in Beijing. Photographer: Kyle Lam/Bloomberg

(Bloomberg) — Under the United States-Hong Kong Policy Act of 1992, the U.S. treats Hong Kong, a semi-autonomous part of China, differently than the mainland in trade, commerce and other areas. Now U.S. President Donald Trump could rescind that “special status” to punish China for recent moves to tighten its grip on the city amid a resurgence of pro-democracy street protests. In its most extreme form, that would effectively mean treating the global financial hub no differently than any other Chinese city, a seismic shift that could harm both economies at an already difficult time. China has promised countermeasures against any foreign “interference.”

1. Is the special status in jeopardy?

Possibly. The president has long had the power to suspend it with an executive order, yet hasn’t. Then came an added pressure: a U.S. law passed last year requires the secretary of state to certify — as part of an annual report to Congress — whether Hong Kong remains “sufficiently autonomous” from Beijing to justify its unique treatment. That includes assessing the degree to which Hong Kong’s autonomy had been eroded by the government of China. (Hong Kong is part of China but has a different legal and economic system, a holdover from its time as a British colony.) On May 27, Secretary of State Mike Pompeo notified Congress that the Trump administration no longer regarded Hong Kong as autonomous from mainland China.

2. So is that the end of the special status?

It’s too soon to say. Pompeo’s decision opens the door for a range of options, from visa restrictions and asset freezes for top officials to possibly imposing tariffs on goods coming from Hong Kong. Other measures could target Chinese Communist Party officials. It’s up to Trump to decide how quickly he wants to move while he’s also threatening consequences for China over its handling of the coronavirus. Hurting China also carries additional risks for the U.S. economy, including the U.S.-China trade deal that Trump had considered one of his biggest achievements, which could affect Trump’s odds of winning re-election. U.S. officials have given mixed signals about what might happen next, and when.

3. What would losing it mean for Hong Kong and China?

While Hong Kong remains a key gateway from China to the rest of the world, it matters far less to the country’s fortunes than it once did. In 2019, 12% of China’s exports went to or through Hong Kong, down from 45% in 1992. China is also far less reliant on inflows of foreign capital and expertise, and has made a much lower priority of making the yuan an international currency. Nonetheless, the city still matters. Hong Kong’s open capital account and adherence to international standards of governance are unmatched by any mainland Chinese city and make it an important base for international banks and trading firms. Revoking the special status would be “the nuclear option” and “the beginning of the death of Hong Kong as we know it,” said Steve Tsang, director of the University of London’s SOAS China Institute.

4. What about for the U.S.?

It has its own reasons for not rocking the boat too much. Hong Kong, the only semi-democratic jurisdiction under Chinese rule, offers U.S. companies a relatively safe way to access the Chinese market and employs a U.S. dollar peg, linking it with the American financial system. According to the Congressional Research Service, the largest U.S. trade surplus in 2018 was with Hong Kong — $31.1 billion. Some 290 U.S. companies had regional headquarters in the city that year and another 434 had regional offices, it said. Hong Kong’s first justice minister after the handover to China in 1997, Elsie Leung, told the South China Morning Post in May that any damage would be mutual: “We are not just getting the benefits – it’s a free-trade arrangement which is good for both sides.”

5. And more broadly?

Pompeo’s decision, let alone any sanctions or move to rescind the special status, will further strain the relationship between the U.S. and China, already under pressure from the coronavirus pandemic, the Hong Kong protests, an ongoing trade war and other issues. In addition to the annual review of Hong Kong’s trading status, the new law requires the president to freeze U.S.-based assets of, and deny entry to the U.S. by, any individuals found responsible for abducting and torturing human rights activists in Hong Kong. Such sanctions could come sooner than a suspension of the trading status, and would obviously complicate things further.

6. How autonomous is Hong Kong?

When Britain handed Hong Kong back to China, the Chinese government pledged that the city would have a “high degree of autonomy” in its legal and economic affairs for 50 years, under an arrangement known as “one country, two systems.” The 2019 U.S. report on conditions in Hong Kong said the city’s autonomy was “sufficient — although diminished.” After the protests erupted in June 2019, the State Department said that “continued erosion” of Hong Kong’s autonomy put its “long-established status in international affairs” at risk.

7. How has China responded?

“Hong Kong is purely China’s internal affair,” Foreign Ministry spokesman Zhao Lijian said in Beijing on May 27, promising to take “necessary countermeasures” against any “interference” by “external forces.” After the U.S. law was passed last year, China said it would sanction some U.S.-based activist groups including the National Endowment for Democracy, Human Rights Watch and Freedom House, and suspend port visits by U.S. Navy ships to Hong Kong. “China urges the U.S. side to correct its mistakes and stop any words and deeds that interfere in Hong Kong affairs and China’s internal politics,” Foreign Ministry spokeswoman Hua Chunying said then. The official Xinhua News Agency has dismissed as “groundless” accusations about the loss of freedom or human rights issues in Hong Kong. It also noted that the 2018 Human Freedom Index compiled by the Fraser Institute, a Vancouver-based think tank, ranked Hong Kong at No. 3, well ahead of the U.S. at No. 17.

8. And Hong Kong?

The city’s leader, Chief Executive Carrie Lam, has defended the national security law (as has Li Ka-shing, Hong Kong’s richest tycoon). Lam also has said it would be “totally unacceptable” for foreign legislatures to interfere in Hong Kong’s internal affairs, and that sanctions would only complicate the problems in the city. (Lam was selected in 2017 by a committee of 1,200 political insiders overwhelmingly loyal to the Chinese government.) She has sought to reassure investors that the city still adheres to the rule of law and has an independent judiciary. She also has defended police actions.

9. Is this what the protesters have been seeking?

As a largely leaderless movement, the Hong Kong protests have made no official request for international assistance. But some prominent Hong Kong pro-democracy activists including Joshua Wong had testified in Washington in favor of the bill, seeking to put pressure on China. On the streets of Hong Kong, some protesters have made clear their interest in U.S. support by waving American flags, singing “The Star-Spangled Banner” and calling on Trump to “liberate” Hong Kong.

  • QuickTakes on Hong Kong’s autonomy and the national security laws Beijing wants to impose.
  • The Congressional Research Service fact sheet on Hong Kong.
  • China criticizes the U.N. high commissioner for human rights, Michelle Bachelet, for wading into the issue.
  • Watch activists Joshua Wong’s and Denise Ho’s testimony via Bloomberg TicToc.
  • Hong Kong faces ominous questions about what happens in 2047.
  • A Bloomberg Opinion editorial saw a small window for compromise in Hong Kong.

(An earlier version corrected the spelling of Pompeo in question 5)

©2020 Bloomberg L.P.





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China’s ‘nervous’ Xi risks new Cold War, last Hong Kong governor says By Reuters



© Reuters. FILE PHOTO: Former Hong Kong governor Chris Patten attends an interview in Hong Kong

LONDON (Reuters) – Chinese President Xi Jinping is so nervous about the position of the Communist Party that he is risking a new Cold War and imperiling Hong Kong’s position as Asia’s preeminent financial hub, the last British governor of the territory told Reuters.

Chris Patten said Xi’s ‘thuggish’ crackdown in Hong Kong could trigger an outflow of capital and people from the city which funnels the bulk of foreign direct investment into mainland China.

“What does it mean? It means serious question marks not just about Hong Kong’s future as a free society but also about Hong Kong’s ability to continue as probably the premier international financial hub in Asia,” Patten said in an interview.

“A lot of people will try to leave Hong Kong,” Patten said, adding that he feared capital would also flow out of the territory which Britain handed back to China in 1997.

The West, he said, should stop being naive about Xi.

“We have long since passed the stage where, without wanting another Cold War, we have to react to the fact Xi seems to want one himself, seems to want to be able to bully his way to whatever he thinks China wants,” Patten said.

Patten, now 76, watched as the British flag was lowered over Hong Kong when the colony was handed back to China in 1997 after more than 150 years of British rule – imposed after Britain defeated China in the First Opium War.

Hong Kong’s autonomy was guaranteed under the “one country, two systems” agreement enshrined in the 1984 Sino-British Joint (NASDAQ:) Declaration signed by then Chinese Premier Zhao Ziyang and British Prime Minister Margaret Thatcher.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Trump orders his administration to begin eliminating Hong Kong privileges By Reuters


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© Reuters. U.S. President Trump holds news conference on China at the White House in Washington

2/2

WASHINGTON (Reuters) – U.S. President Donald Trump said on Friday he was directing his administration to begin the process of eliminating special treatment for Hong Kong, in response to China’s plans to impose new security legislation in the territory.

Trump made the announcement at a White House news conference, saying China had broken its word over Hong Kong’s autonomy. He said its move against Hong Kong was a tragedy for the people of Hong Kong, China and the world.

“We will take action to revoke Hong Kong’s preferential treatment,” he said, adding that the United States would also impose sanctions on individuals seen as responsible for smothering Hong Kong’s autonomy.

Trump’s move follows Chinese plans to impose new national security legislation on the former British colony. Secretary of State Mike Pompeo has said the territory no longer warrants special treatment under U.S. law that has enabled it to remain a global financial center.

Trump said he was directing his administration to begin the process of eliminating policy agreements on Hong Kong, ranging from extradition treatment to export controls.

He said he would also issue a proclamation on Friday to better safeguard vital university research by suspending the entry of foreign nationals from China identified as potential security risks.

Sources, including a current U.S. official, told Reuters on Thursday that the latter move, which had been expected, could impact 3,000 to 5,000 Chinese graduate students.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Asian stocks turn red as Hong Kong tensions sour mood By Reuters



© Reuters. A man wearing protective face mask walks in front of a stock quotation board outside a brokerage in Tokyo

By Stanley White and Koh Gui Qing

TOKYO/NEW YORK (Reuters) – Asian shares erased gains and the yuan languished on Thursday on growing worries China’s planned security law for Hong Kong would spark a broader diplomatic confrontation with the United States.

MSCI (NYSE:)’s broadest index of Asia-Pacific shares outside Japan fell 0.35%, having been in positive territory earlier in the day. Shares in Hong Kong skidded 1.75%. Stocks in China fell 0.55%.

U.S. stock futures pared earlier gains to trade 0.17% higher.

Not all markets fell with investors in some countries keeping their focus on prospects of a post-coronavirus economic recovery.

Japan and Australia were both higher while European stock futures also defied the gloom with the pan-region up 1.22%, German rising 1.3% and futures climbing 1.34%.

All the same, the outlook remains fraught. The biggest risk to equities is the Sino-U.S. relationship, which is likely to worsen after U.S. Secretary of State Mike Pompeo said Hong Kong no longer warranted special treatment under U.S. law.

“All eyes remain on the U.S.-China relationship,” said Chris Weston, the head of research at Pepperstone, a currency broker. “This is a risk for markets…one questions if the equity markets are too complacent here.”

The proposal for new legislation is expected to be passed on Thursday by the National People’s Congress.

Hong Kong shares erased early gains and fell as worries about U.S retaliation took hold.

Pompeo said overnight that China had undermined Hong Kong’s autonomy so fundamentally that the territory no longer warranted special treatment, a potentially big blow to the city’s status as a financial hub.

A punitive U.S. response to China on the issue of Hong Kong could result in a tit-for-tat reaction from Beijing, further straining ties between the world’s two biggest economies and further hobbling global growth.

Sources have said the U.S. government may suspend Hong Kong’s preferential tariff rates for exports to the United States, a far less severe response than formally revoking Hong Kong’s special status under U.S. law.

President Donald Trump said he will announce a response to China’s policies towards Hong Kong later this week.

Some share markets chose instead to focus on signs of recovery from the coronavirus pandemic.

Australian shares rose to the highest in more than two months after the country’s central bank governor bolstered hopes for a quick economic rebound.

stock index rose to the highest since late February as investors cheered the re-opening of economic activity after a fall in coronavirus infections.

The S&P 500 closed above 3,000 for the first time in almost 12 weeks on Wednesday, bolstered by bank stocks, as investors hoped that the world economy can recover as it re-opens.

Yields on 10-year U.S. Treasuries rose slightly to 0.6966%. Although 10-year yields are up from an all-time low of 0.4980% struck in March, they are still a whopping 120 basis points below highs seen in January.

futures fell 3.2% to $31.76 a barrel, while fell 1.73% to $34.14 per barrel as investors fretted about Trump’s response to China.

The was mired near a record low of 7.1966 per dollar due to uncertainty over Hong Kong’s future. In onshore trade, the yuan was near its weakest since September last year, which was during the height of the U.S.-China trade war.

The euro made a fresh eight-week high of $1.1035, bolstered by a 750 billion euro plan to prop up the European Union’s virus-hit economies. But it retreated as doubts about delivering the scheme crept in and last sat at $1.1015.

rose 0.44% to $1,716.41 per ounce as some investors opted for the safety of the precious metal.



Crude Oil Dips as Tensions Rise in Hong Kong By Investing.com



© Reuters.

By Peter Nurse

Investing.com – Oil prices dipped Wednesday, consolidating after recent strong gains while traders remain wary of heightened Sino-U.S. tensions.

At 9:25 AM ET (1325 GMT), futures traded 2% lower at $33.66 a barrel. The international benchmark contract fell 2.1% to $35.41.

These prices have rebounded strongly this month, as the Organization of the Petroleum Exporting Countries and producers including Russia, a grouping referred to as OPEC+, cut their output by nearly 10 million barrels per day in May and then also June.

U.S. crude futures have more than doubled over the last month, while the Brent contract has posted gains of over 70%.

That said, investor sentiment has been soured by rising U.S.-China tensions, this time over the treatment of the semi-autonomous city of Hong Kong.

U.S President Donald Trump announced he will soon unveil the U.S. reaction to China’s national security laws for Hong Kong and Macau, while, in return, China threatened to retaliate against any U.S. actions, which could include sanctions.

Another trade war between the globe’s two largest economies could hit demand for oil just as it edges back in the wake of the global shutdown to combat the coronavirus.

Attention in the market is also starting to turn to the next OPEC+ meeting, which is currently scheduled for June 9-10. 

Russia’s energy minister had a meeting with oil producers in the country in order to hear views around potentially extending deeper cuts into the second half of the year, Reuters reported.

“Given the strength we have seen in the market over the past month, and the expectation that demand will continue to recover in the coming weeks and months, this could also make Russia more reluctant to take further action than what has already been agreed,” said analysts at ING, in a note to clients. 

Ahead of that, investors will get a measure of how U.S. stockpiles look when the American Petroleum Institute reports after the bell, a day late due to Monday’s holiday. 

Seevol.com reported a 4.26-million-barrel decline for the week to May 22 at the Cushing, Okla. hub that stores crude delivered against expiring spot contracts of WTI.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.